Published: April 14, 2023
By: Concentric Staff Writer
The U.S. Energy Information Administration (EIA) updated its estimate of heating costs for U.S. households after winter temperatures were higher than expected and heating fuel prices were “stable.”
EIA said that U.S. households consumed less heating this winter than the agency originally estimated in its Winter Fuels Outlook, published in October 2022. In that earlier outlook, EIA said households were likely to spend more during the 2022-2023 winter because of higher fuel prices and higher heating demand. Forecasts at that time were for winter to be slightly colder.
But EIA estimates that average U.S. households that use heating oil consumed 470 gallons of heating oil over the winter, 9 percent below the October 2022 estimate of 519 gallons.
In a March 30 outlook, EIA estimated consumer prices at an average of $4.45 per gallon, 9 cents lower than forecast in October. U.S. household expenditures for heating oil are estimated to average $2,094 for the 2022-2023 heating season, more than 11 percent below the October 2022 estimate of $2,354.
Despite being lower than expected, heating costs were up 13 percent from the 2021-2022 heating season, EIA said. About 4 percent of U.S. households use oil as a primary heating fuel, mostly in the Northeast.
“At the beginning of the winter, we expected that Russia’s full-scale invasion of Ukraine and subsequent sanctions would limit Europe’s supply of heating oil, and record-high natural gas prices would lead to fuel switching from natural gas to distillate fuel (which includes heating oil and diesel fuel), contributing to higher heating oil prices,” EIA said.
But winter weather was also warmer in Europe, reducing distillate demand, and exports from the Middle East and Asia helped offset the loss of Russian distillate. Distillate inventories have increased in Europe and the U.S. in recent months, EIA said.
All views expressed by the author are solely the author’s current views and do not reflect the views of Concentric Energy Advisors, Inc., its affiliates, subsidiaries, or related companies. The author’s views are based upon information the author considers reliable at the time of publication. However, neither Concentric Energy Advisors, Inc., nor its affiliates, subsidiaries, and related companies warrant the information’s completeness or accuracy, and it should not be relied upon as such.